GUESTS FROM THE FUTURE

Four years ago the tourism sector of Azerbaijan was mainly focused on local market and partly served the international business tourism segment. After the global energy crisis and the subsequent devaluation of the national currency, Manat, the government took a set of measures to change the vector of development of the recreational sector. Thanks to large-scale reforms, including the cheapening of hotel services, increase in the number of international airlines, simplification of visa procedures, the number of foreign tourists and travel services in Azerbaijan increased, and the tourist flow geography was radically diversified.

Three-percent growth

"Government of Azerbaijan supports the tourism sector at state level. It took a series of measures to promote the country's tourism potential abroad, attract visitors from a number of new regions of the world, and develop new tourist destinations and simplify the visa regime," Chairman of the Board of the Azerbaijan Small and Medium Business Development Agency Orkhan Mammadov said at the opening ceremony of the international exhibition Tourism and Travel (AITF 2019) traditionally organized by Iteca Caspian. According to Mammadov, as a result of joint efforts, the activity of small and medium-sized businesses in tourism increases every year and the industry is turning into one of the leading areas of the non-oil sector of the Azerbaijani economy.

Chairman of the State Agency for Tourism (SAT) Fuad Naghiyev mentioned that another evidence of the growing attention to the tourism sector of Azerbaijan is the participation in AITF 2019 of 189 companies from 17 countries of the world, representing the most promising areas of the recreational sphere. The event is held under the slogan "The whole world. One exhibition".

The expert community also confirms the real boom in the travel sector of Azerbaijan over the past three years, considering the domestic travel sector along with the most significant areas for the country's economy. Statistical data also confirms the effectiveness of the strategy: for example, last year the number of foreign tourists visiting Azerbaijan from 193 countries exceeded 2.8 million, which is 6% higher than in 2018. Although the dynamics of the tourist flow in 2018 was less than in 2017 (20% growth), Azerbaijan is still among the top three leaders of the post-Soviet region, and is second only to Georgia in the South Caucasus.

However, it is more important that in 2018 foreign tourists spent more than $2 billion in Azerbaijan, thereby contributing to the development of the hotel and restaurant sector, entertainment and other related destinations. Bloomberg included Azerbaijan along with Turkey, Georgia, Macedonia and Iceland among the ten fastest growing tourist destinations in the world, which confirms the stability of Azerbaijan's tourism perspectives. Another important indicator of the growth was the triple increase in booking of hotels in Azerbaijan through one of the largest travel companies in the world, Intrepid Travel.

"In 2019, there is a three-percent increase in the number of foreign tourists in Azerbaijan, which is facilitated by the tourists from new countries. Over 360,000 foreign nationals visited Azerbaijan in January-February 2019, and most of them are citizens of Russia and Georgia, said SAT spokesman Kanan Guluzadeh. "At the same time, for the first time the number of tourists from Georgia exceeded the number of Russian tourists."

The number of Arab tourists has decreased

In recent years, an increase in the number of tourists in 15 tourist markets has been recorded in Azerbaijan. In particular, there has been an increase in tourist traffic from the Middle East. In 2018, 554.1 thousand tourists from Arab countries visited Azerbaijan. The number of tourists visiting Azerbaijan from South Asia (Pakistan, India) increased by 70%, and from Central Asia (Uzbekistan, Kazakhstan, Tajikistan, etc.) increased by 30%.

At the same time, K. Guluzadeh mentioned that in January-February 2019, there was a decrease in the number of Arab tourists by 7%. "However, this is a temporary phenomenon, because the winter period is considered to be a weak tourist season. It is also necessary to take into account the fact that the Middle East is a politically unstable region and there are often problems in connection with leaving the country. On the other hand, direct flights from Arab countries to Azerbaijan decreased and certain changes have been made in the procedures for issuing visas to Iraqi tourists. This and a number of other factors influenced the decrease in the number of Arab tourists", K. Guluzadeh said.

Nevertheless, the SAT spokesperson believes that the situation may stabilise when two new Arab airlines will start direct flights to Azerbaijan, including from Oman. Negotiations are underway with Saudi Arabia on the organisation of permanent direct flights. In order to increase the tourist flow from Arab countries, two official representations of Azerbaijan were opened in December 2018 in the UAE and Saudi Arabia. This year a large-scale systematic campaign is launched to promote the potential of Azerbaijani tourism in the Middle East, which will provide an additional flow of guests and stabilise the situation.

Another version of the decline in the number of tourists from Arab states was voiced by the chairman of the Azerbaijan Tourism Association (AzTA) Nahid Baghirov. "The reason for the decline in the flow is associated with high competition in the tourist market, where Arab travellers are in high demand. In this market, you have to fight every minute, you have to promote and remind about yourself. What has been done in this area earlier now needs to be done ten times more actively," Baghirov believes. According to N. Baghirov, it is necessary to put maximum efforts to keep the interest of Arab tourists to travel to Baku and regions of the country - to expand the list and improve the quality of services, types of entertainment, finally, reduce prices, strengthening the competitive advantages of local tourism products. If the flow of Arab tourists attracted to Azerbaijan in recent years subsides, it is unlikely that it will be possible to reach the previous level in the near future, Baghirov believes.

In 2018, the number of Iranian tourists also decreased by 33%. The negative trend continues this year too. Until recently, Iranian tourists were the third largest tourist group after Russians and Georgians. Experts believe this is associated with the new trends in the Islamic Republic, where the authorities, in the context of tight international sanctions and the depreciation of the Iranian national currency, were forced to tighten fiscal measures to prevent currency outflow from the country. As a result, the number of Iranians traveling to other countries decreased by 50% during the year.

Betting on China and Russia

In order to overcome these negative aspects, Azerbaijan is taking a series of measures to diversify the tourist flow and develop new destinations.

"According to the Strategy for Tourism-2023, Azerbaijan faces the task of increasing the incoming tourist flow in the next four years to 4 million people," said Deputy Chief Executive Officer of the Tourism Bureau of Azerbaijan (TBA) Bahruz Askerov recently.

According to the "Concept of attracting tourists to Azerbaijan in 2018–2023," it is supposed to ensure the task primarily due to the development of tourist ties with the countries providing the most massive tourist flow, as well as by expanding air traffic, improving the quality of service and cheapening tourism products.

In particular, the most important direction of geographic diversification is the increase in tourist traffic from China. "In the coming years, the number of Chinese tourists arriving to Azerbaijan can reach 200,000 people. In 2018, we achieved a 50 percent increase, but now the goal to ensure a multiple increase in the number of Chinese tourists," Fuad Naghiyev said.

These statements are based on the Memorandum of Understanding on the simplification of group tours of Chinese tourists to Azerbaijan, recently concluded between the State Agency for Tourism of Azerbaijan and the Ministry of Culture and Tourism of China. Today, the one and a half billion China ranks first in the world in the number of tourists in the domestic and foreign markets, and it is not surprising that this country has been chosen as a priority for attracting tourists to Azerbaijan.

The most important direction in stimulating the tourist flow is the post-Soviet space, and above all Russia. The prospects of this trend are evidenced by numerous reports of the Russian analytical agency TourStat. So, according to their data, Azerbaijan, together with Belarus and Kazakhstan, re-entered the top three best CIS countries for sightseeing tours of Russian citizens.

"In 2018, Azerbaijan received a little less than 900 thousand Russian tourists, which is 5% higher than in 2017. By the end of this year, the Ministry of Tourism plans to bring the flow from Russia to one million people," Florian Sengstschmid, Director General of the Tourism Bureau of Azerbaijan, said. According to him, Azerbaijan has a huge potential in the Russian market, so an annual growth of about 10% is quite real. Another component of the Russian-Azerbaijani tourist cluster can be the development of cruise tourism in the Caspian Sea, considering the commissioning of the Peter the Great river-sea vessel, which will cruise in the Caspian and Black Seas. By the summer of 2019, possible options for creating joint pilot projects in the direction of the North Caucasus are being considered in Baku and Moscow, and negotiations are currently under way related to the facilitated passage of border procedures for participants in package tours.

In general, Azerbaijan has identified twelve major geographical areas for the development of foreign tourism. "Official tourist representations of Azerbaijan have already been opened in Frankfurt, Dubai, Riyadh, Mumbai, Moscow and China, and four more will be created in the near future," said Bahruz Askerov. In total, by 2020 Azerbaijan plans to bring to ten the number of tourist missions abroad.